$6$

Multuple Choice

$1$ point

In response to a firw queitions regarding present valon, future value, simple interest and compounding interest Gollo made the following points

Point $1$: The present value decreases as the time period increases and the unterest rate is inversely related to the future value.

Poet $2.$ An mmity doe has payments that occur at the beginning of each time period. The present value of an annuity will increase when either the amount of the anneriy paymert mereases or the merrest rate increases.

Point $3.$ A premium bood has a coupon rate that exceeds the yield to maturity and the market price that exceeds the face valoe. When a bood's yield to matharity is greater than the bond's coupon, the bond is selling at a discount.

Point $4$: Muricipal bonds generally have a fower coupon rate than comparable corporate bonds and are appealing to individuals with low marginal tax raties.

The Point $2$ from Crillo's statement is most likely incorrect with respect to:

An mmuity doe

Anmuity payments.

Interest rate.